Ways Your Business Can Accept Credit Cards

We are quickly becoming a cashless society. Writing checks is even being outmoded. Credit cards and debit cards rule commerce today, both offline and online. So if you are going to survive in the business world, you need to accept credit cards as a form of payment.

There are really only two ways you can accept credit card payments and we will look at both of them in this article. Both ways require the use of a merchant account. A merchant account is mandatory before a credit card payment can be accepted. The merchant account acts as the interface between the customer's credit card and the merchant's bank account.

The two types of merchant accounts:

The first type of merchant account is a shared account, also called a Third Party Merchant. Some examples of popular shared merchant accounts in use today are Paypal, Clickbank and 2checkout. By utilizing these, it is easy for just about anyone to start accepting credit cards online. You simply use their merchant account to process your orders. For this privilege, you are charged a per transaction fee. This fee is usually larger than what you would have to pay if you had your own merchant account, but Third Party Merchants are very popular among many internet businesses. The main drawback is that there is a delay before you receive your money.

The only delay with Paypal is the 3 business day lag period before your funds make it to your bank account, but you are able to spend your Paypal funds as soon as you receive a payment. This is the reason that Paypal is the favored method of accepting credit cards for many online businesses. Both 2checkout and Clickbank pay your money twice a month, which can make it difficult if you need your money sooner.

The second type of merchant account is the type that you get in your own name and is connected directly to your banking account. The advantage is that you get your money much sooner. The disadvantage is that unless you have a fairly high sales volume, you may have to pay monthly fees in addition to a per transaction fee. Getting approved for a merchant account is a lot easier today than it was a few years ago. You should still expect to have to pass a fraud and background check before your merchant account is granted.

Each of the types of merchant accounts has good and bad points. Deciding which is best for you will depend upon the amount of sales you process each month. You can always start off using Paypal and then get your own merchant account as your business grows.